Taiwan Semiconductor Manufacturing Co., a leading chip company, launched its inaugural semiconductor factory in Japan on Saturday as a part of its continuous worldwide growth.

At the ceremony in Kikuyo, TSMC Chairman Mark Liu expressed his sincere appreciation for the continuous assistance given by all parties involved, including the Japanese government, local community, and business partners such as Sony and Denso. The company’s founder, Morris Chang, was also in attendance.

Japan is currently making efforts to reestablish its position in the chip manufacturing sector.

JASM, also known as Japan Advanced Semiconductor Manufacturing, is scheduled to commence operations later this year. TSMC has also revealed its intentions to build a second facility in Japan, which is anticipated to begin production in approximately three years. A combined investment of $20 billion from the private sector has been allocated for the construction of these two plants, both of which are located in the Kumamoto region of southwestern Japan.

The Prime Minister of Japan, Fumio Kishida, shared a video message to congratulate the opening of the plant, describing it as a significant initial step. He emphasized the friendly ties between Japan and Taiwan, and highlighted the significance of advanced semiconductor technology.

The Japanese government has committed to providing TSMC with 476 billion yen ($3 billion) to incentivize the company to invest. Kishida has announced a second package, increasing Japan’s financial support to over 1 trillion yen ($7 billion).

While TSMC is constructing a new facility in the United States and has revealed plans for a first plant in Europe, there is potential for Japan to be a desirable choice.

Japan, which is located closer to Taiwan, holds a significant partnership with the United States. China, a neighboring country, asserts ownership over the independent island and insists that it falls under their jurisdiction. This ongoing dispute serves as a source of tension in the relationship between the U.S. and China.

This decision holds significance for Japan as they have recently allotted 5 trillion yen ($33 billion) to revitalize their chips sector.

In the past forty years, Japan held a strong position in the chip industry, with Toshiba Corp. and NEC leading production globally with a 50% market share. However, this has decreased to less than 10% in recent years due to rivalry from South Korean, American, and European companies, as well as TSMC.

The global spread of COVID-19 had a detrimental impact on the availability of electronic chips, causing production delays in various industries, such as automakers. Japan, which heavily relies on imported chips, was forced to explore domestic chip manufacturing in order to reduce its dependence on foreign suppliers.

Sony, Denso, and Toyota are all putting money into TSMC’s Japan facility, but TSMC will still own 86.5% of JASM.

After both plants become operational, TSMC predicts that they will generate 3,400 advanced job opportunities.

Securing a sufficient quantity of cutting-edge chips is essential due to the increasing demand for electric cars and artificial intelligence. A few experts point out that Japan remains a leader in key areas of the field, as evidenced by Tokyo Electron, a company that produces the equipment necessary for chip production.

However, it is evident that the government of Japan is determined to catch up. The city of Tokyo is providing backing for multiple semiconductor initiatives across the country, including collaborations with American companies Western Digital and Micron, as well as Japanese corporations Renesas Electronics, Canon, and Sumitomo.